Oct. 3 (Bloomberg) -- BusinessEurope, a Brussels-based
employers’ federation, urged the European Parliament to reject a
proposal by the European Commission to curb the oversupply of
carbon permits as of 2013.

“Pre-emptive short-term measures would create a precedent,
resulting in greater uncertainty, and could have major
repercussions for European business,” BusinessEurope said in a
letter to members of the environment and industry committees in
the parliament obtained by Bloomberg News.

The lobby group’s objection relates to a plan known as
backloading, which would delay the sale of carbon permits from
2013, when the third phase of Europe’s emissions trading system
begins. The European Parliament must approve a change to the
bloc’s emissions trading law before it can be started.

The change in law and backloading were proposed by the
European Commission in July after after carbon permits dropped
to a record. Under the commission’s proposal, removed permits
would be returned to the market later in the third phase that
ends in 2020, leaving the pollution caps intact.

Backloading would interfere with a discussion on a more
comprehensive overhaul of the EU cap-and-trade program after
2020, according to BusinessEurope. The structure of the system
needs improvements to deliver carbon cuts while avoiding harm to
the competitiveness of European industries, and has to work in
coordination with other EU energy policies, the lobby said.

EU carbon permits for delivery in December fell as much as
2.7 percent to 7.66 euros a metric ton on the ICE Futures Europe
exchange in London, the lowest in four days. It was at 7.70
euros as of 11:08 a.m. in London. Permits traded at as little as
5.99 euros on April 4 and have lost 27 percent in the past year.